Cyprus

The third largest island in the Mediterranean. A member of the European Union. Leads a policy of nonalignment and therefore is not part of NATO. 36% of the territory is controlled be the Turkish Republic of Northern Cyprus, 3.7% by the UN, 2.7% by the UK, the rest by the Republic of Cyprus.

Capital

Nicosia

Official language

Greek

Currency

Euro (EUR)

Government

Presidential republic

Economy

The Cyprus economy is stable enough. The main items of income are tourism (about 3 million tourists a year) and revenues from the many registered companies and banks. The banking sector of Cyprus has extensive international links. The influence of Greece on the economy of Cyprus has always been significant and has increased since January 2011, when Greece's sovereign rating was lowered.

Legal system

Based on English common law

Corporate law

  • Companies Law of 2001
  • Capital Gains Tax Law of 2002
  • International Trusts Law of 1992

Types of companies

  • Private Company Limited by Shares
  • Exempt Private Company 
  • Public Company Limited by Shares
  • Company Limited by Guarantee
  • Branch of Overseas Company
  • General Partnership
  • Limited Partnership
  • Sole Proprietorship
  • Trust

Private Company Limited by Shares

  • Resident and non-resident companies can be registered in Cyprus. The company is deemed a resident of Cyprus if it is controlled and operated from Cyprus, and the majority of directors are residents of Cyprus.
  • Usually the authorized capital of a Cyprus company is 5000 EUR. The minimum issued share capital is 1000 EUR.
  • Bearer shares are not allowed. Public subscription for shares is not permitted.
  • Any activity not prohibited by law is resolved, it is permitted to trade on the territory of Cyprus.
  • Number of Shareholders: minimum 1, maximum 50. Details of shareholders appear on the public record.
  • The minimum number of Directors is 1. Corporate directors are allowed. To obtain relief under the taxation agreements of Cyprus signed with various countries, the majority of directors must be resident in Cyprus. Information on directors is contained in public records.
  • The company secretary must be resident in Cyprus.
  • The AGM shall be conducted in any country at least 1 time per year. Every company must prepare a full set of financial statements in accordance with International Financial Reporting Standards, and each parent company, that has one or more subsidiaries, except for the company, which is itself a subsidiary, should present consolidated financial statements. Annual Report and a copy signed by the director and company secretary, is submitted to the Registrar and shall be accompanied by financial reports.
  • Information available at request of third parties is the information on directors, secretary, shareholders, memorandum and articles of association, information about a registered agent and registered office.

Exempt Private Company

A private limited liability company shall be exempt from tax if:

  • Its shares do not belong to a legal entity (exception - an exempt company)
  • The number of shareholders does not exceed 50
  • Directors of the Company are the only individuals
  • Exempt Private Companies do not need to file statements with the annual report
  • Government restrictions on loans to directors are not applied to them

Taxation

Since 2003 all newly registered companies are subject to 10% of the Cyprus tax on profits. For all types of companies general corporate tax rate is 10% (it is the lowest of the countries of the European Union). Dividends, interest and royalties paid to non-residents of Cyprus are exempt from taxation. VAT in Cyprus is 15%.

Agreements on avoidance of double taxation

Austria, Belgium, Bulgaria, Great Britain, Hungary, Germany, Greece, Denmark, Egypt, India, Ireland, Italy, Canada, Qatar, China, Kuwait, Lebanon, Luxembourg, Malta, Mauritius, Moldova, Norway, UAE, Poland, Russia and CIS, Romania, San Marino, Serbia, Seychelles, Singapore, Syria, Slovakia, Slovenia, USA, Thailand, Finland, France, Montenegro, Czech Republic, Sweden, South Africa, Japan.